Happenings @ IU EURO and current events of Europe

Kentucky’s Declining Exports to Europe Continues

While exports to the EU and the Eurozone appear to be picking up for Indiana and Ohio in 2010; unfortunately the same cannot be said for Kentucky. As the first chart shows, the Bluegrass State is on pace to see its exports to the 27 member states fall by 11.3% (indicated in green), including a 21.5% decrease to the 16 countries that use the euro (indicated in blue). As a result, while exports to the Eurozone may help its northern neighbors recover from the Global Recession, the Eurozone does not appear to be a cure for Kentucky.

Why is Kentucky not seeing the benefits of the expanding trade with the EU and the Eurozone, while Indiana is seeing the opposite and is on pace to have record exports to Europe? As the below graph shows, while some categories appear to be holding steady or even showing an increase over 2009, transportation equipment has seen a major decrease from 2009.

Compared to the first half of 2009, transportation equipment exports from Kentucky have fallen by 44%. In comparison, transportation equipment (which is the Hoosier State’s 4th largest category of exports) has risen by 19%, and the change is even more spectacular in Ohio. Transportation equipment is the largest category of goods that the Buckeye State exports to the Eurozone, and the state has seen a 155% increase to $728 million for the first half of 2010.

Like the Eurozone itself, the American recover in exports to the Eurozone is starting to appear to be a mixed bag. As a result, states need to closely examine their ties with Europe, as the region still offers opportunities, but it is not a guaranteed source of economic growth.